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COVID-19

Pandemic positions some companies to do better than others

Andy Uhler Apr 30, 2020
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Companies that sell shelf-stable foods have benefited during the coronavirus pandemic. Chandan Khanna/AFP via Getty Images
COVID-19

Pandemic positions some companies to do better than others

Andy Uhler Apr 30, 2020
Companies that sell shelf-stable foods have benefited during the coronavirus pandemic. Chandan Khanna/AFP via Getty Images
HTML EMBED:
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Corporate performance in this economic crisis won’t be uniformly terrible. Twitter announced on Thursday it has seen a spike in daily active users. Food giant Kraft Heinz reported higher revenue in the first quarter. Comcast had a not-great earnings report but did benefit from a lot more people signing up for broadband. Turns out, there are business winners and losers in the new COVID-19 reality.

Increased demand for food staples means higher sales for companies like Kellogg’s, which Thursday reported stronger-than-expected earnings. John Stanton, professor of food marketing at Saint Joseph’s University, said people are stocking up on foods with long shelf lives, like Nutri-Grain Grapetastic breakfast bars.

“If you get panicky and you say, ‘Oh, I don’t know if I can get to the store that often. I’m going to buy more of these products,’ you’re much more likely to use them up,” Stanton said. “And when you go to the store, you buy them again.”

But, will we keep buying Pop-Tarts and Eggo waffles after the lockdowns are over? Nicholas Rossolillo, president and investment advisor at Concinnus Financial, thinks we might — at least for a while as people develop new buying habits and sales stay elevated.

“If you’re driving to the Grand Canyon, you have to go up the mountain first, and then you go back down the mountain. But you settle onto this high-elevation plateau,” Rossolillo said. “I think that’s what sales for a lot of these staples companies are going to do.”

It’s not just food companies. Amazon, Google, Microsoft and Netflix are also seeing some benefits from folks staying at home. Facebook said Wednesday its ad revenue has stabilized. And Daniel Ives, managing director and senior equity research analyst  at Wedbush Securities, notes that on Thursday, Twitter reported growth in daily active users.

“They could be a net beneficiary, even though there’s definitely headwinds in their business,” Ives said.

Twitter may have more users, but the company also disclosed that ad revenue dropped 27% from March 11 to March 31 as the pandemic worsened.

COVID-19 Economy FAQs

So what’s up with “Zoom fatigue”?

It’s a real thing. The science backs it up — there’s new research from Stanford University. So why is it that the technology can be so draining? Jeremy Bailenson with Stanford’s Virtual Human Interaction Lab puts it this way: “It’s like being in an elevator where everyone in the elevator stopped and looked right at us for the entire elevator ride at close-up.” Bailenson said turning off self-view and shrinking down the video window can make interactions feel more natural and less emotionally taxing.

How are Americans spending their money these days?

Economists are predicting that pent-up demand for certain goods and services is going to burst out all over as more people get vaccinated. A lot of people had to drastically change their spending in the pandemic because they lost jobs or had their hours cut. But at the same time, most consumers “are still feeling secure or optimistic about their finances,” according to Candace Corlett, president of WSL Strategic Retail, which regularly surveys shoppers. A lot of people enjoy browsing in stores, especially after months of forced online shopping. And another area expecting a post-pandemic boost: travel.

What happened to all of the hazard pay essential workers were getting at the beginning of the pandemic?

Almost a year ago, when the pandemic began, essential workers were hailed as heroes. Back then, many companies gave hazard pay, an extra $2 or so per hour, for coming in to work. That quietly went away for most of them last summer. Without federal action, it’s mostly been up to local governments to create programs and mandates. They’ve helped compensate front-line workers, but they haven’t been perfect. “The solutions are small. They’re piecemeal,” said Molly Kinder at the Brookings Institution’s Metropolitan Policy Program. “You’re seeing these innovative pop-ups because we have failed overall to do something systematically.”

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